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The economic forecast has a major weirdness. Most of my colleagues and I think that this year will bring light-to-moderate growth, but we’re also warning of the possibility of a recession triggered by the European financial crisis. How do you, as a business leader, prepare your company for growth if it occurs, but also protect it from recession?

In the previous video, I talked about a stance that allows your company, like a base runner, to be prepared to go in either direction. In this video, we’ll discuss how you can implement that idea with key strategic initiatives.

So you had a planning session, maybe an offsite. If it was at a nice resort in a sunny climate, then you should have invited me. I love helping companies with their planning. Anyway, there are two types of results from a planning session:

1) Goals for key financials, such as sales, expenses and profits, or

2) Key strategic initiatives, the big over-arching efforts your enterprise will undertake this year. I’m going to talk about those strategic initiatives in this video, then discuss how you deal with routine business processes in the next video.

Here’s an example, hopefully well enough disguised so that you don’t know who I’m thinking about. This company’s management team identified three big initiatives to work on this year:

1. Improve after-sale service

2. New CRM system

3. Expand into a new territory.

Here’s what you should do with your list. Add a column for Cost. We don’t need a lot of accuracy here, just a general idea.

The service initiative will have some small costs, which should be offset by reduced warranty expense and returns, so we’ll call it a net cost of zero. Mostly this is about attitudes and processes.

The new CRM system has a significant dollar cost—not huge but certainly not trivial.

The expansion has a big cost: a new distribution center, equipment, trucks and sales personnel.

Now add a column for whether you’d want this result in the middle of a recession.

The service initiative will be even more valuable in a recession, when customers are looking for any excuse to pare down the number of vendors.

A good CRM system will be even more valuable in a recession, enabling senior executives to see customer orders and expectations with a shorter time lag.

The new distribution center? In a recession competitors will be discounting prices, and you really don’t want to enter a market in the middle of a price war. So the answer here is No.